Sobowale On Business

Mr President, Sir, you probably don’t need a reminder that there is a recession on in the country. As a matter of fact, what we have is stagflation – a wicked combination of inflation (now 18.5%) and declining GDP (now -2.4%). Most economists and marketing professionals would testify that the two translate to low purchasing power and empty pockets. Permit me to confess that I am both a practitioner of the dismal science (economics), as well as Marketing.

Newly-elected Governor Godwin Obaseki of Edo State struck the right note in his maiden address to the people of Edo State when he declared that “there is more free lunch”. He has his reasons which the tables below will pertly explain. Contrary to what some consider an early rebuke of his immediate past predecessor, it was nothing more than a bow to reality. Facts remain the eternal enemies of illusions which still drive most of our politicians promising free everything under the sun.

ON Tuesday, November 15, 2016, several Nigerian news media carried the news of the Presidency raising alarm over imminent famine in Nigeria by January 2017 – which is a mere five weeks away. In fact, the word used was “Nigerians should brace themselves”.

When the currenyear ends on December 31, 2016, several previously sterling reputations would have been diminished because they were deaf to advice which did not emanate from official circles. Despite all the nonsense about having all hands on deck, they preferred to err their own way instead of being corrected by others. In order of protocol, the reputations steadily declining are those of President Buhari, Vice President Osinbajo, SAN, the Minister of Budget and Planning, the Minister of Finance and Mrs Uwais, wife of the former Chief Justice of the Federation who is the Director of the N500 billion Social Welfare Programme, SWP.

The president had announced the Social Protection Programme, SPP, with the sort of hyperbole expected of people still having a hangover from the promises made during elections. According to Buhari, “I am happy to formally launch, by far, the most ambitious Social Protection Programme in our history.

MY first major article on banks was in 1992; when one Mr Jimi Lawal, was the Managing Director of Alpha Merchant Bank. From the quarterly, semi-annual and annual reports of the bank, anyone could be forgiven for thinking that Mr Lawal, who was also a flashy dresser and certainly not conservative, as traditional bankers were, had his own mint for printing the funds his bank was allegedly making. He was not alone.

In the report titled ‘Banks bad loans rise above CBN limit’, the report which was attributed to Bloomberg, the global rating agency, also quoted Mr Emefiele’s statement in which he tried to re-assure Nigerians and the international community that all is well. According to the CBN Governor: “The Nigerian financial system remains stable and resilient in spite of prevailing macroeconomic challenges.”

The Minister had just announced officially that Nigeria was in a recession – with Gross Domestic Productivity, GDP, declining by 2.06 per cent. It was the worst in over twenty years. And, given the causes, the trend might continue for the balance of the year.

Buhari was speaking the day before to people that were tagged “creative youths”. One only hopes they had brains as well. He also vowed to continue to blame past administrations. Whether that was a threat or promise is difficult to say. But, to Buhari’s stubborn insistence to continue to bore Nigerians, a late Vice President of the United States, Hubert Humphrey, 1911-1978, had given the appropriate riposte as far back as 1965 in Madison Wisconsin, on August 23.

For good measure, the expert would remind everybody that before the Age of Oil exploded on Nigeria in 1973, the country was a large exporter of several products cocoa, rubber, cotton, palm oil, groundnuts, coal, hides and skins, tin, rubber etc; and when the three Regional Marketing Boards East, North and West had offices in London to handle the export of products from their own particular region.

LAST month, when the Central Bank of Nigeria took out advertisements in several national newspapers to disclaim the “rumour” that Skye Bank was not distressed, an article appeared on this page titled WHY CBN AND LAGOS STATE MIGHT FAIL IN THEIR EFFORT TO SAVE SKYE BANK.

“I assure you we are going to get out of our economic problems..we are going to make Nigeria great again…Our size, our resources will not be for nothing”. President Buhari, during campaign at Edo State on behalf of Obaseki, candidate of the All Progressives Congress, APC.

A sudden earthquake is about to hit the whole of Nigeria this month; not the sort of physical tremor which devastates buildings, breaks up bridges and brings down power lines – while destroying lives. Ours will be a social upheaval never experienced in this country for as long as the oldest of us can remember.

Announcement on shop window at Odunlami Street, Lagos Island. Odunlami Street, for those not familiar with Lagos Island, is famous for the shops selling coffins and arranging funerals. The bread shop is stuck between two of those shops. So its announcement concerning the increase of bread price was made with all the finality of a death sentence pronounced by a hanging judge. Bread, as the saying goes, is the staff of life. No food is more universally consumed than bread; the second is rice.

The Central Bank of Nigeria, CBN, and the Lagos State government have different reasons for desperately averting possible Skye Bank distress. Even the hint of likely distress inhibiting deposits and inviting a run on the bank is not in their interests. For the CBN, the collapse of any bank, at this time, is likely to create collateral damage affecting other banks, governments, the organized private sector and the financial system. So their anxiety on this matter is understandable.